EUR/USD loses further ground and tests lows near 1.1750

• EUR/USD remains on the defensive well below 1.1800.\
• USD-buying keeps the pair under pressure on Wednesday.
• ECB’s Lagarde said FX moves could impact the inflation level.

Sellers continue to push further and now drag EUR/USD to new 4-day lows in the 1.1750 region on Wednesday.

EUR/USD weaker post-Lagarde

EUR/USD resumes the weekly leg lower on Wednesday following the rejection from Monday’s monthly peaks in the area past the 1.19 barrier.

The continuation of the dollar’s rebound (despite Tuesday’s negative session) keeps weighing on the pair, while global markets keep digesting the recent news of the Pfizer’s vaccine (NYSE: PFE).

Recent comments by ECB’s Chief Christine Lagarde also fuel the selling bias. In fact, Lagarde reiterated that FX developments impact negatively on inflation prospects, adding that the central bank’s main tools remain adjustments in the PEPP and TLTROs. She reiterated that all options are at the bank’s disposal.

Lagarde also noted that the recovery is forecast to be bumpy while efforts by fiscal policy remain key.

What to look for around EUR

EUR/USD sticks to the consolidative mood for the second session in a row following Monday’s strong gains to the area beyond 1.19 the figure. In the very near-term, EUR/USD is expected to remain under scrutiny on dollar dynamics mainly coming from the US post-elections scenario and the progress of the pandemic. On the more domestic front, the euro appears propped up by auspicious results from domestic fundamentals (despite momentum appears somewhat mitigated in several regions), although the now more dovish stance from the ECB prompts some caution when comes to bullish attempts. As usual, the euro still looks supported by the solid position of the EMU’s current account.

EUR/USD levels to watch

At the moment, the pair is losing 0.49% at 1.1755 and faces the next support at 1.1709 (Fibo level of the 2017-2018 rally) followed by 1.1694 (100-day SMA) and finally 1.1602 (monthly low Nov.4). On the other hand, a break above 1.1920 (monthly high Nov.9) would target 1.1965 (monthly high Aug.18) en route to 1.2011 (2020 high Sep.1).